A New Foundation: SOA Implementation and Bank Transformation

Implementing a successful service-oriented architecture starts with making the right decisions early on in the process.

It wasn't just small changes that Wachovia's Corporate and Investment Banking (CIB) division was eyeing when it first looked to deploy a service-oriented architecture (SOA). Rather, it was a total transformation resulting from a mandate from the division's head to create a business-aligned IT group, according to Tony Bishop, SVP and director of product management for the CIB technology group.

Charged with differentiating the bank and growing its business in the face of larger-scale competitors, Wachovia's CIB division had to map out where its technology needed to be to match where it wanted the business to go, relates Bishop. Under the leadership of Susan Certoma, who stepped into the role of CIO for the CIB division in 2004, Bishop was about to embark on a three-year total transformation of the business enabled by SOA.

Like Wachovia, with similar goals of improving operational efficiency and growing the business, banks worldwide are turning to SOA. According to recent research from Needham, Mass.-based TowerGroup, half of the top 20 banks in the United States already are implementing SOA strategies.

As Wachovia and other banks are discovering, leveraging SOA's loosely coupled services to overcome siloed technology has the potential to completely change a financial institution. Yet the road to a full SOA implementation is marred with potholes and roadblocks. According to experts, as SOA gains momentum in banking, it's important for banks to be aware of the key decisions they face about services, technology and governance.

Approaching SOA with clear goals and realistic expectations may be the most important first step a bank can take, Wachovia's Bishop says. Although Certoma set the ultimate goal for her SOA transformation as business differentiation, she also outlined more-specific subsets of the project, including decreased time to market and cost of delivery for new products, Bishop points out. >>

"When you think of the CIB business focusing on institutional clients, you are focused on either creating liquidity, transferring risk or providing advice," Bishop relates. He says Wachovia was looking for "the technology that allows you to build and make the right decisions, and do it in the most automated and cost-efficient way possible."

Though the plan was to transform the entire CIB organization using SOA, the project was divided into easy-to-swallow pieces. "Funding and support was built on trust and incremental deliverables," Bishop recalls. "It was, 'Here is the plan -- each year we are going to deliver increments. If we do, then you will fund the next piece.'"

While Wachovia had support from the top, often that is not the case. "One of the first success factors is that the C-suite [executives] understand what they're getting into," says Spencer Greene, CTO of Palo Alto, Calif.-based Tibco's financial services industry group, which provides business- integration and process-management software. Whoever is championing the project should develop a business case and financial case with plenty of details to ensure that the people at the top understand the project and where it can add value, Greene stresses. The more customer-centric an SOA project is, the more likely executives will jump on it, he adds.

Again, an incremental or evolutionary plan, such as Blue Bell, Pa.-based Unisys' 3D Visible Enterprise, can help bring upper-level management on board. The four-layer blueprint is designed to assist banks with SOA and other technology implementations, according to Brian Ott, a VP in Unisys' technology group. The guidelines, he contends, break down complex business transformations based on proven experiences. 3D Visible Enterprise addresses the setting of a bank's SOA goals -- through a business case, value proposition and capabilities road map -- in its first strategy layer, Ott notes.